Groupon stock has been falling since it revealed on Friday that it was revising its first quarter earnings to reflect a larger than expected loss. With its spotty accounting history, Groupon is now a juicy target for shareholder lawyers, who believe the company may be liable for the losses investors have suffered since Friday. The stock is currently down about 12 percent.

When it filed to go public with the Securities and Exchange Comission, Groupon’s accounting raised some red flags and the company eventually revised its financials with the SEC before its IPO. Considering all the scrutiny, the news on Friday that it’s auditor, Earnst and Young, said the newfound errors revealed ”material weakness in internal controls” piqued the curiosity of lawyers.

“When you do a registration statement there’s extensive due diligence so you would think this was uncovered at the time,” Jacob Zamansky of the New York-based law firm Zamansky & Associates, which represents investors, told Deal Journal.

Groupon blamed its new losses on higher than expected returns from the holiday season. But our own Rocky Agrawal argues that the company should have seen this coming a mile away.

Well, for starters, it’s not a coupon company nor a marketing company. At its core, Groupon’s U.S. business is a receivables factoring business, as I wrote last year. They give loans to small businesses at a very steep rate (the price of the discount plus Groupon’s commission). They get the money to fund these loans from credit card companies such as Chase Paymentech. Groupon is essentially a sub-prime lender that does zero risk assessment. And as word continues to spread about what a terrible deal running a Groupon is for many categories of businesses, the ones that will choose to run Groupons are the ones that are the most desperate.

Unfortunately for shareholders, their stock, unlike Groupon’s deals, cannot be so easily refunded.